ANALYSIS OF APRIL 1, 2021 SUPREME COURT OPINIONS

(Posted April 1, 2021) On this national holiday – it is a holiday for baseball fans, anyway – the Supreme Court of Virginia hands down rulings in seven argued appeals. Five of those are published opinions.

Local government

Cue the battalions! Line up the partisans on both sides! Today the Supreme Court decides City of Charlottesville v. Payne, the litigation over Charlottesville’s decision to remove statues from and rename parks dedicated to Generals Lee and Jackson, of Civil War fame. In such litigation, we may justifiably expect stirring discussions of political and military history and a highly charged discussion of the place of such monuments in modern society.

Well, actually, this ruling is about grammar. That’s all. No fireworks; no cannon; no stirring speeches.

After Charlottesville decided, in the wake of the August 2017 civil disturbance in the City, to remove the Lee and Jackson statues, several local citizens sued to enjoin the removal. They cited a 1997 statute that allows localities to erect war memorials, and bars anyone, including the locality itself, from disturbing or interfering with them thereafter. (Do you realize how hard it is to distinguish between statue and statute while typing? Gives me yet another round of respect for my capable legal assistant, the estimable Cathryn Chitty, who types my briefs and pleadings.)

The circuit court agreed with the plaintiffs; it declared the removal resolution to be in contravention of the 1997 statute, enjoined any removal or disturbance, and awarded the plaintiffs attorneys’ fees. The justices agreed to take a look at the case.

Justice Goodwyn pens today’s unanimous opinion. As noted above, the decision comes down to parsing the language of the statue – I mean, statute – and the court finds that all of the provisions therein are in the present tense. That means that the statute only applies prospectively: It only governs monuments erected pursuant to the statutory grant of authority.

The Jackson statue first rose in 1921; the monument to Lee came three years later. That means that the City isn’t bound by the 1997 act, at least for the purposes of these pre-1997 monuments. The court thus reverses and enters final judgment for the City.

You were expecting fireworks?

Attorneys’ fees

We’re all familiar with the American rule on fees. That rule states that each party generally must bear its own legal expenses. There are few exceptions: fee-shifting statutes or contract provisions, plus the occasional fraud award. Today the court considers whether to add another exception. The case is Bolton v. McKinney, and comes from Rockingham County.

The warring parties here are former business partners. When the relationship soured and they partners separated, McKinney filed lawsuits against Bolton. These actions led to the collapse of the business and Bolton’s bankruptcy.

In bankruptcy court, the two entered into an agreement. In exchange for $25,000, McKinney gave Bolton a covenant not to sue for any matters within the scope of the agreement.

That didn’t end well; McKinney sued Bolton anyway; three times, in fact. The courts dismissed those suits, citing the covenant. Bolton then sued McKinney for breach-of-contract damages. The damages that he claimed were his attorneys’ fees in defending the three actions.

A judge designate heard the matter and ruled that McKinney had indeed breached the covenant. But after pondering the matter, he ruled that the American rule barred an award of fees as damages. Bolton got a writ.

Justice Mims turns his efficient pen to the task of drafting today’s unanimous opinion. (Careful courtwatchers know that Justice Mims is one of the two most concise writers on the court, along with Senior Justice Russell.) The justices acknowledge that the question presented here – whether attorneys’ fees are recoverable as damages in a suit for breach of a covenant not to sue – is one of first impression in Virginia.

Courts elsewhere have come down on both sides of this question. Some rigorously apply the American rule, while others have held that in suits like this, fees are the damages; they’re the only thing that will make the wronged plaintiff whole. The Supreme Court today agrees with the latter approach, holding that attorneys’ fees may be awarded in suits like this. The court remands to circuit court for calculation of those damages – and, presumably, appellate attorneys’ fees.

Expert-witness disclosures

One of the happiest aspects of an all-appellate practice is that I don’t have to fill out disclosures under pretrial scheduling orders. I’ve never prepared one in my entire career; nor have I ever litigated a John Crane motion. The disclosures of two experts form the backdrop for Galloway v. Northampton County, involving a challenge to real-estate tax assessments by a county and town.

Galloway owns property near the Town of Cape Charles, a beautiful spot off the shores of the Chesapeake Bay on Virginia’s Eastern Shore. The property spans the town/county line. Galloway sued both jurisdictions, claiming that they had overvalued his property in the wake of the 2008 recession and its concomitant depression of land values.

I tried a number of these challenges in my previous life in the City Attorney’s Office here in Virginia Beach, so I can tell you that you absolutely, positively need expert witnesses – specifically, real-estate appraisers – to prove your case. Galloway identified two, and the circuit court struck them both, leaving him powerless to prove his case. The court accordingly dismissed the lawsuit. Here’s what happened to prompt those rulings.

Galloway identified Expert #1 back in 2015, just before an unexplained three-year pause in the proceedings. He did so in interrogatory answers, specifying the expert’s name, credentials, opinions, and the basis for those views. This document was a unified response: It began with interrogatory answers, then set out responses to document requests. The client signed the interrogatory answers under oath, as required; the lawyer signed the RPD answers but not the interrogatories. He also signed the certificate of service at the very end.

Years later, just before trial, Galloway’s lawyer noticed that he hadn’t signed the interrogatory answers. Without prompting, he signed them and filed that. The circuit court ruled that his eleventh-hour signature made the disclosure of Expert #1 effective on that date, well beyond the 90-day disclosure deadline. The court accordingly excluded that expert.

The problem with Expert #2 was far simpler; Galloway first identified him roughly 100 days before trial, saying only that he would provide testimony details later. But he didn’t provide those details for two months, well after the 90-day cutoff. The court struck this expert, too.

On appeal, the Supreme Court analyzes the two exclusions separately. For Expert #2, the court has little trouble in affirming. The localities didn’t receive any details about the expert’s opinions until about a month before trial. Under circumstances like these, circuit courts have the discretion to exclude the witness, to avoid surprises just before trial.

Expert #1 is different. The localities knew four years before trial what he would say. The signature omission was a minor matter in circumstances like this. The justices note that the lawyer signed the discovery-response document elsewhere. This brings to mind the Supreme Court’s 2008 ruling in Hampton Roads Seventh Day Adventist Church v. Stevens, where the court ruled that a testator who forgot to sign the signature line on a will, but had signed the self-proving affidavit on the next age, had “subscribed” the will.

Today’s opinion also notes that the remedy for an unsigned document like this is that it must be corrected “promptly after the omission is called to the attention” of the party. Galloway’s lawyer corrected it before anyone else noticed.

This is a no-harm-no-foul situation, and the Supreme Court today reverses the exclusion of Expert #1, holding that the exclusion was an abuse of discretion. And because Galloway asserted that he could make out his case with either expert, that means the suit goes back to circuit court for trial.

Trusts

As I’ve noted before, I always find it dismaying when you find the same surname on both sides of the v. in litigation. Plofchan v. Plofchan is a contest over the trust of a family matriarch. It’s a complex factual and procedural setup, so I’ll just focus on the key rulings. If you want more detail on the facts and posture, click on the link; Justice Goodwyn does a good job of spelling everything out in understandable, though necessarily lengthy, terms.

There are two primary issues here. First, the court addresses a collateral-estoppel challenge to the lawsuit. Similar legal proceedings had made their way through the New York court system, leading to a final judgment. Today, the justices rule that collateral estoppel doesn’t bar this action because the issues aren’t the same, and the issue in the Virginia case wasn’t specifically decided in the New York trial.

Second, the justices take up the always-touchy issue of standing. The plaintiffs in the suit were the named trustees of the trust. The settlor – that would be the matriarch – had terminated the trust and “fired” the trustees (two of her children). When they sued to enforce the trust, the matriarch filed a plea in bar asserting that since they had been fired and the trust terminated, they had no standing to sue. After a non-evidentiary hearing, the circuit court agreed and dismissed the suit.

The justices reverse this ruling, too. They turn to elementary pleading concepts to do so. Because the circuit court decided the plea without evidence, the Supreme Court accepts the facts as pleaded in the complaint. That pleading asserted that the plaintiffs were in “office” and had the right to enforce the terms of the trust. The trial court had to accept that in deciding the plea.

The justices accordingly return the matter to circuit court for further proceedings. Note that that’s not necessarily a trial; I suspect that the matriarch can employ other procedural tools to defend this case short of a trial.

The court announces one other published opinion and two unpublished orders today. Each of these appears to me to be highly fact-specific, with little in the way of general application. As such, I’ll list them here so you can review them if you want.

Stafford County v. D.R. Horton, Inc. is a land-use decision where the court rules that a county can require new planning commission approval for a revised cluster development.

Bustos v. Commonwealth addresses a criminal defendant’s request to instruct the jury that Virginia’s geriatric-release statute is so little used as to be essentially ineffective. Predictably, the justices refuse to require an instruction like that.

Jung v. Park leads to reinstatement of a jury verdict in a fraud case. The circuit court had set aside most of a jury’s award of damages. In my experience, setting aside a jury verdict is the surest way for a judge to draw appellate scrutiny.